You might be among the richest people in the world and not realise it

Published
19

WASHINGTON: Most people these days know that global wealth is unequal, and becoming more so. But the latest statistics that illustrate these trends are still mind boggling, no matter how you look at them.

There are lots of ways of comparing the inequality of wealth — which is defined as people’s assets, like their savings and property, minus their debts. One is that the world’s richest 1 per cent has more wealth than the rest of the globe combined, according to data from Credit Suisse.

Another is that, in 2015, just 62 people in the world had the same wealth as the poorer half of humanity — 3.6 billion people, according to a new report by Oxfam, the antipoverty organisation, which makes calculations based on the Credit Suisse data.

These 62 people are very, very rich, to be sure, but it’s also true that the global bottom half is desperately poor. And for that reason, who really counts among the world’s richest — the top 100, the top 1pc, the top 10pc, etc — is a matter of perspective.

It depends on whether you’re judging yourself against your neighbours, your fellow citizens, or the entire world’s population. A middle class American with a little bit of wealth feel quite privileged after all.

To be among the wealthiest half of the world last year, an adult needed to own only $3,210 in net assets (minus debts), according to the data. To be in the top 10pc, a person needed to have only $68,800 in wealth.

To be in the top percentile, the threshold climbed to $760,000, according to Credit Suisse.

Consider that, according to the Federal Reserve, the median American family had $81,000 in net worth in 2013, and the average family had $535,000 in net worth.

To get an idea of this inequality, you can try visualising the global wealth distribution like a pyramid:

The base comprises adults with less than $10,000 in wealth. This is the bulk of the global population — 71pc, to be exact, who altogether own only 3pc of global wealth, according to Credit Suisse data.

The next level up, with wealth of $10,000 to $100,000, contains 21pc of the world’s population, but has 12.5pc of its wealth.

The next level, from $100,000 to $1 million, has just 7.3pc of the population and about 40pc of the wealth.

And at the very top of the pyramid are those with over $1 million in wealth. This group contains only 0.7pc of the world’s adults, but collectively they own 45pc of the world’s assets, says Credit Suisse.

Bloomberg-The Washington Post Service

Published in Dawn, January 24th, 2016

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